Middle East Conflict Drives Inflationary Pressure in UK—Chancellor
(MENAFN) Rising energy costs linked to the conflict in the Middle East are adding to inflationary pressures in the United Kingdom, Chancellor of the Exchequer John Healey warned on Wednesday.
In a letter outlining the annual mandate for the Bank of England’s Monetary Policy Committee, Healey told Governor Andrew Bailey that monetary policy remains essential to helping households and businesses by ensuring inflation returns sustainably to its 2% target over the medium term.
"Higher energy prices resulting from the conflict in the Middle East are putting upwards pressure on inflation," Healey wrote.
He acknowledged that the committee has primary responsibility for bringing inflation back to the target but noted that the government’s fiscal strategy also supports this objective by gradually reducing borrowing and helping to ease price pressures.
Healey stressed that maintaining low, stable inflation is crucial for sustained economic expansion and improved living standards. He added that price stability reduces uncertainty and helps lower costs for both consumers and businesses.
The chancellor also confirmed that the Bank of England’s Asset Purchase Facility would continue operating throughout the 2027-28 financial year and remain available for as long as necessary, consistent with the multiyear approach announced by policymakers on Sept. 17.
In a letter outlining the annual mandate for the Bank of England’s Monetary Policy Committee, Healey told Governor Andrew Bailey that monetary policy remains essential to helping households and businesses by ensuring inflation returns sustainably to its 2% target over the medium term.
"Higher energy prices resulting from the conflict in the Middle East are putting upwards pressure on inflation," Healey wrote.
He acknowledged that the committee has primary responsibility for bringing inflation back to the target but noted that the government’s fiscal strategy also supports this objective by gradually reducing borrowing and helping to ease price pressures.
Healey stressed that maintaining low, stable inflation is crucial for sustained economic expansion and improved living standards. He added that price stability reduces uncertainty and helps lower costs for both consumers and businesses.
The chancellor also confirmed that the Bank of England’s Asset Purchase Facility would continue operating throughout the 2027-28 financial year and remain available for as long as necessary, consistent with the multiyear approach announced by policymakers on Sept. 17.
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